Bill Text: IA SF215 | 2021-2022 | 89th General Assembly | Introduced


Bill Title: A bill for an act relating to the solar energy system tax credit available against the individual and corporate income tax, the franchise tax, the moneys and credits tax, and including effective date and retroactive applicability provisions.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2021-02-08 - Subcommittee: Dawson, Goodwin, and Jochum. S.J. 274. [SF215 Detail]

Download: Iowa-2021-SF215-Introduced.html
Senate File 215 - Introduced SENATE FILE 215 BY BOLKCOM , HOGG , JOCHUM , GIDDENS , CELSI , TRONE GARRIOTT , and PETERSEN A BILL FOR An Act relating to the solar energy system tax credit available 1 against the individual and corporate income tax, the 2 franchise tax, the moneys and credits tax, and including 3 effective date and retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1790XS (4) 89 jm/jh
S.F. 215 DIVISION I 1 SOLAR ENERGY SYSTEM STATE TAX CREDIT 2 Section 1. Section 422.11L, Code 2021, is amended by 3 striking the section and inserting in lieu thereof the 4 following: 5 422.11L Solar energy system tax credits. 6 1. As used in this section: 7 a. “Commercial solar energy system” means a solar energy 8 system on property that is not residential or multiresidential. 9 b. “Residential solar energy system” means a solar energy 10 system on residential property or multiresidential property. 11 c. “Solar energy system” means a system of equipment capable 12 of collecting and converting incident solar radiation into 13 thermal, mechanical, or electrical energy and transporting the 14 energy by a separate apparatus to storage or to a point of use. 15 2. Beginning with installations completed on or after 16 January 1, 2021, the taxes imposed under this subchapter, less 17 the credits allowed under section 422.12, shall be reduced by 18 a solar energy system tax credit equal to fifteen percent of 19 the gross cost of the solar energy system, not to exceed the 20 following amounts: 21 a. For a residential solar energy system, five thousand 22 dollars. 23 b. For a commercial solar energy system, twenty thousand 24 dollars. 25 3. Any credit in excess of the tax liability is not 26 refundable but the excess for the tax year may be credited 27 to the tax liability for the following ten years or until 28 depleted, whichever is earlier. 29 4. a. An individual may claim the tax credit allowed a 30 partnership, limited liability company, S corporation, estate, 31 or trust electing to have the income taxed directly to the 32 individual. The amount claimed by the individual shall be 33 based upon the pro rata share of the individual’s earnings of 34 the partnership, limited liability company, S corporation, 35 -1- LSB 1790XS (4) 89 jm/jh 1/ 6
S.F. 215 estate, or trust. 1 b. A taxpayer who is eligible to claim a credit under this 2 section shall not be eligible to claim a renewable energy tax 3 credit under chapter 476C. 4 c. A taxpayer may claim more than one credit under this 5 section, but may claim only one credit per separate and 6 distinct solar energy system installation. The department 7 shall establish criteria, by rule, for determining what 8 constitutes a separate and distinct installation. 9 d. (1) A taxpayer must submit an application to the 10 department for each separate and distinct solar energy 11 system installation. The application must be approved by the 12 department in order to claim the tax credit. The application 13 must be filed by May 1 following the year of the installation 14 of the solar energy system. 15 (2) The department shall accept and approve applications 16 on a first-come, first-served basis until the maximum amount 17 of tax credits that may be claimed pursuant to subsection 5 18 is reached. If for a tax year the aggregate amount of tax 19 credits applied for exceeds the amount specified in subsection 20 5, the department shall establish a wait list for tax credits. 21 Valid applications filed by the taxpayer by May 1 following the 22 year of the installation but not approved by the department 23 shall be placed on a wait list in the order the applications 24 were received and those applicants shall be given priority 25 for having their applications approved in succeeding years. 26 Placement on a wait list pursuant to this subparagraph shall 27 not constitute a promise binding the state. The availability 28 of a tax credit and approval of a tax credit application 29 pursuant to this section in a future year is contingent upon 30 the availability of tax credits in that particular year. 31 5. a. The cumulative value of tax credits claimed annually 32 by applicants pursuant to this section shall not exceed ten 33 million dollars. 34 b. If an amount of tax credits available for a tax year 35 -2- LSB 1790XS (4) 89 jm/jh 2/ 6
S.F. 215 pursuant to paragraph “a” goes unclaimed, the amount of the 1 unclaimed tax credits shall be made available for the following 2 tax year in addition to, and cumulated with, the amount 3 available pursuant to paragraph “a” for the following tax year. 4 6. On or before January 1, annually, the department shall 5 submit a written report to the governor and the general 6 assembly regarding the number and value of tax credits claimed 7 under this section, and any other information the department 8 may deem relevant and appropriate. 9 7. The director shall adopt rules pursuant to chapter 17A to 10 administer this section. 11 Sec. 2. Section 422.33, subsection 29, paragraph a, Code 12 2021, is amended to read as follows: 13 a. The Beginning with installations completed on or after 14 January 1, 2021, the taxes imposed under this subchapter shall 15 be reduced by a solar energy system tax credit equal to sixty 16 percent of the federal energy credit related to solar energy 17 systems provided in section 48(a)(2)(A)(i)(II) and section 18 48(a)(2)(A)(i)(III) of the Internal Revenue Code , not to exceed 19 twenty thousand dollars. For installations occurring on or 20 after January 1, 2016, the applicable percentage of the federal 21 energy credit related to solar energy systems shall be fifty 22 percent allowed under section 422.11L . 23 Sec. 3. Section 422.60, subsection 12, paragraph a, Code 24 2021, is amended to read as follows: 25 a. The Beginning with the installations completed on or 26 after January 1, 2021, the taxes imposed under this subchapter 27 shall be reduced by a solar energy system tax credit equal to 28 sixty percent of the federal energy credit related to solar 29 energy systems provided in section 48(a)(2)(A)(i)(II) and 30 section 48(a)(2)(A)(i)(III) of the Internal Revenue Code , not 31 to exceed twenty thousand dollars. For installations occurring 32 on or after January 1, 2016, the applicable percentage of the 33 federal energy credit related to solar energy systems shall be 34 fifty percent allowed under section 422.11L . 35 -3- LSB 1790XS (4) 89 jm/jh 3/ 6
S.F. 215 Sec. 4. Section 533.329, subsection 2, paragraph k, Code 1 2021, is amended to read as follows: 2 k. The Beginning with the installations completed on or 3 after January 1, 2021, the moneys and credits tax imposed under 4 this section shall be reduced by a solar energy system tax 5 credit allowed under section 422.11L . 6 Sec. 5. WAIT LIST FOR CLAIMS PRIOR TO JANUARY 1, 2021. The 7 wait list pursuant to section 422.11L, subsection 3, paragraph 8 “d”, subparagraph (2), Code 2021, in existence prior to January 9 1, 2021, shall remain in effect, and an applicant from that 10 wait list shall be given priority on any new wait list based 11 upon the date the application for the credit was received by 12 the department. 13 Sec. 6. EFFECTIVE DATE. This division of this Act, being 14 deemed of immediate importance, takes effect upon enactment. 15 Sec. 7. RETROACTIVE APPLICABILITY. This division of this 16 Act applies retroactively to January 1, 2021, for tax years 17 ending on or after that date. 18 DIVISION II 19 MAXIMUM CUMULATIVE VALUE OF TAX CREDITS FOR YEAR 2020 20 Sec. 8. CUMULATIVE VALUE OF TAX CREDIT FOR YEAR 21 2020. Notwithstanding section 422.11L, subsection 4, Code 22 2021, the maximum cumulative value of tax credits that may be 23 claimed during the 2020 calendar year shall not exceed ten 24 million dollars. 25 Sec. 9. EFFECTIVE DATE. This division of this Act, being 26 deemed of immediate importance, takes effect upon enactment. 27 Sec. 10. RETROACTIVE APPLICABILITY. This division of this 28 Act applies retroactively to tax years beginning on or after 29 January 1, 2020, but before January 1, 2021. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill relates to the solar energy system tax credit. 34 Under existing law, the Iowa solar energy system tax credit 35 -4- LSB 1790XS (4) 89 jm/jh 4/ 6
S.F. 215 available against the individual or corporate income tax, the 1 franchise tax, or the moneys and credits tax equals the sum of 2 50 percent of the federal residential energy efficient property 3 credit, not to exceed $5,000, plus 50 percent of the federal 4 energy credit related to solar energy systems, not to exceed 5 $20,000. 6 Division I strikes provisions basing the Iowa solar energy 7 system tax credit as a percentage of federal energy tax credits 8 and creates a new Iowa solar energy system tax credit for 9 installations completed on or after January 1, 2021. The bill 10 creates a residential solar energy system tax credit equal 11 to 15 percent of the gross cost of the system, up to $5,000. 12 The bill creates a separate commercial solar energy system 13 tax credit not to exceed 15 percent of the gross cost of the 14 system, up to $20,000. The tax credit is available against the 15 individual and corporate income taxes, the franchise tax, and 16 the moneys and credits tax. 17 The bill defines “residential solar energy system” to 18 mean a solar energy project on residential property or 19 multiresidential property. The bill defines “commercial solar 20 energy system” to mean a solar energy system on a property that 21 is not residential or multiresidential. 22 Any tax credit approved under the bill is not refundable 23 but the excess for the tax year may be credited to the tax 24 liability for the following 10 years or until depleted, 25 whichever is earlier. 26 A taxpayer eligible to claim a credit under the bill is not 27 eligible to claim a renewable energy tax credit under Code 28 chapter 476C. 29 The bill provides that a taxpayer may claim more than one tax 30 credit, but may claim only one credit per separate and distinct 31 solar energy system installation. 32 The bill permanently increases the maximum cumulative value 33 of tax credits that may be claimed during the year from $4 34 million to $10 million. 35 -5- LSB 1790XS (4) 89 jm/jh 5/ 6
S.F. 215 The bill provides that the wait list in existence prior to 1 January 1, 2021, shall remain in effect, and an applicant from 2 that wait list shall be given priority on any new wait list 3 based upon the date the application for the credit was received 4 by the department. 5 The division takes effect upon enactment and applies 6 retroactively to January 1, 2021, for tax years ending on or 7 after that date. 8 Division II raises the cumulative value of solar energy 9 system tax credits that may be claimed during the 2020 calendar 10 year from $4 million to $10 million. The division takes effect 11 upon enactment and applies retroactively to tax years beginning 12 on or after January 1, 2020, but before January 1, 2021. 13 -6- LSB 1790XS (4) 89 jm/jh 6/ 6
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